RBA May 2015 announcement - 25 point cut

Why have AMP Bank decreased the interest rates on their variable rate loan products less than the Reserve Bank's decrease of the Cash Rate Target?

The Reserve Bank's Cash Rate Target is only one of a number of factors that we must consider when reviewing our pricing position on interest rates.

Other factors include:

the cost of wholesale funding that we obtain from both the local and overseas markets, and
the price of raising deposits from retail customers, and
the current market conditions and our competitive position.
In setting the new price we have considered the factors noted above, plus the impact of changing rates on our shareholder and our customers. Accordingly we are decreasing the interest rates for our variable rate loans by 0.20% pa.

Got to look after those shareholders!

When will these changes take effect?
If you have a variable rate loan or line of credit with us, the interest rate will decrease by 0.20% pa on Monday 25 May 2015.

Very kind of AMP to delay the rate cut for 20 days after the RBA announcement...keep lining their pockets!
 
Read this recently on the issue of the latest cuts ;)

ANZ has been the only Big Bank to pass on the RBA's full 0.25% interest rate cut this month. Westpac have passed on 0.22%, while NAB and Commonwealth have only passed on 0.20%. Even some smaller banks such as CUA and Non-banks like Firstmac passed on the full rate cut for existing mortgages.

The Big Four will no doubt be sure to pass on the interest rate cut for new borrowers, therefore penalising their existing mortgage customers.

While the snub may not seem like much to begin with, it could add up to thousands of dollars in interest over the term of the loan. However, despite some lenders choosing to turn their back on loyal mortgage customers, it may not be the end of the world. It just may be the catalyst that makes you decide to look at your options.
 
I'm with BankWest at approx. 87% LVR w/ P&I rpayments. A bit disappointed with the .17 rate cut.

Been wanting to get onto an IO loan for a while now - I guess there is no scenario where that is viable though with the extra LMI costs that I would occur? EDIT: If I refinanced away from BW.
 
I'm with BankWest at approx. 87% LVR w/ P&I rpayments. A bit disappointed with the .17 rate cut.

Been wanting to get onto an IO loan for a while now - I guess there is no scenario where that is viable though with the extra LMI costs that I would occur? EDIT: If I refinanced away from BW.

Whats the problem? PPOR not IP?
 
Whats the problem? PPOR not IP?

PPOR.

A couple of problems:
  • Should not have gone with BankWest in the first place given my goals
  • Loan is P&I when I should have gone IO (lesson learned too late)
  • Additional LMI costs if a refinance away from them
 
PPOR.

A couple of problems:
  • Should not have gone with BankWest in the first place given my goals
  • Loan is P&I when I should have gone IO (lesson learned too late)
  • Additional LMI costs if a refinance away from them
I don't think your position is bad;

you are paying down some of the PPoR loan currently, you just received a .17% cut, on top of record lows...all good.

When we all sit here on SS among investors who are the more financially educated percent of the community, it is easy to feel inadequate and feel like you are falling behind (I do).

If you asked someone back in 1989/90 if they would like a 5% interest rate, and how about another .17% on top for good measure?...

They would be crying with happiness and relief.

Just be patient, work the repayments and when the time is right you can buy again.
 
I'm with BankWest at approx. 87% LVR w/ P&I rpayments. A bit disappointed with the .17 rate cut.

Been wanting to get onto an IO loan for a while now - I guess there is no scenario where that is viable though with the extra LMI costs that I would occur? EDIT: If I refinanced away from BW.

Sometimes it's a cost worth wearing if it will allow you to get to your goals. BW is useless for investors, and it's pretty much inevitable that you'll have to move from them at some stage if you're hoping to access equity, so it's worth asking the question "Is there any benefit to staying put?"

Investing is never a straight line, it's always a zig-zag of trying, learning and correcting. A few grand LMI cost is not an expensive lesson in the big scheme of things.
 
20 points, effective 8/5/15 (a week before most others).

Hi Peter, I'm with Macquarie and for the life of me can't find any announcement on MY mortgage to say the rates dropped.

Do you know if it's (0.20% drop) across the board for all existing loans?

And how come they tell you guys (brokers), but not the actual customers!?
 
Hi Peter, I'm with Macquarie and for the life of me can't find any announcement on MY mortgage to say the rates dropped.

Do you know if it's (0.20% drop) across the board for all existing loans?

And how come they tell you guys (brokers), but not the actual customers!?

The tell us because we're special ;)

Macquarie have confirmed a 20 point drop.

Technically I think lenders meet the legal requirements of informing you by posting something in your internet banking.
 
The tell us because we're special ;)

Macquarie have confirmed a 20 point drop.

Technically I think lenders meet the legal requirements of informing you by posting something in your internet banking.
I wish us mortals were special too! :)

That's the thing, the LAST TIME the rates dropped, there was a tiny little notification in online banking.

THIS TIME there's absolutely nothing.....I've got four separate loan accounts and I've clicked around everywhere looking for that tiny little notification but can't find it!

I've looked at their twitter, and their main website and there's just no announcement.

It's pretty weird if it's been in-effect for a week now!
 
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